Wednesday, July 28, 2010

DTN News: $8.7-Billion Missing In Iraq Funds

Defense News:DTN News: $8.7-Billion Missing In Iraq FundsSource: DTN News / Reuters - Nationalpost.com(NSI News Source Info) WASHINGTO, U.S. - July 28, 2010: The U.S. Department of Defense has been unable to account properly for US$8.7-billion of Iraqi oil and gas money, funds earmarked for humanitarian needs andreconstruction after the 2003 invasion, according to an audit released yesterday.The figure is nearly 96% of the US$9.1-billion the Pentagon received from the Development Fund for Iraq (DFI), said the report from the U.S. Special Inspector General for Iraq Reconstruction (SIGIR).It described lax management of some of the billions of dollars designated for rebuilding war-shattered Iraq, where residents routinely complain about lack of electricity and other basic services more than seven years after the invasion.The DFI was established by the Coalition Provisional Authority (CPA), the U.S.-run body that took charge of Iraq after the invasion.It was meant to harness money from export sales of oil, petroleum products and natural gas, as well as frozen Iraqi assets and surplus funds from the UN oil for food program, and spend it for the benefit of Iraqis. The UN Security Council approved the creation of the fund."Weaknesses in DoD's financial and management controls left it unable to properly account for $8.7-billion of the $9.1-billion in DFI funds it received for reconstruction activities in Iraq," the SIGIR report said.The report cited poor record-keeping and said most of the organizations at the Pentagon that received DFI funds failed to establish required Treasury Department accounts."Our selective review shows the records were not always complete. For example, DoD could not provide documentation to substantiate how it spent US$2.6-billion," it said.The funds are separate from the US$53-billion allocated by Congress for rebuilding Iraq."Iraq should take legal action to get back this huge amount of money," said Sabah al-Saedi, chairman of the Parliamentary Integrity Committee, according to a report by The Associated Press.The money "should be spent for rebuilding the country and providing services for this poor nation."The government of Iraq ordered the Pentagon to return DFI funds at the end of 2007. But the audit found Department of Defense organizations that were still holding and in some cases spending DFI funds."The breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss," the report said.Iraq is almost completely reliant on oil revenues to rebuild infrastructure and housing stock devastated by years of war and economic sanctions. More than 95% of the federal budget comes from the oil sector.The audit report said the Pentagon had agreed to adopt and implement by November the inspector general's recommendations to tighten up financial controls."SIGIR believes the identified actions, if implemented as planned, will address SIGIR's concerns," according to the report.The U.S. Army Corps of Engineering and the U.S. Central Command disputed the finding, it added.The Central Command said documents that could account for the missing money were "likely" deposited at a U.S. base but retrieving it "would require significant archival retrieval efforts."The Army Corps said it had provided auditors with US$2-billion of the funds.This is not the first time allegations of missing billions have surfaced in relation to the US-led invasion of Iraq and its aftermath, the BBC reports.In 2005, the inspector general criticized the CPA for its management of an US$8.8-billion fund that belonged to the Iraqi government.A criminal investigation led to the conviction of eight U.S. officials on bribery, fraud and money-laundering charges.*This article "$8.7-Billion Missing In Iraq Funds" & link to this article....click here.*This article is being posted from Toronto, Canada By DTN News ~ Defense-Technology News, contact: dtnnews@ymail.com